U.S. Oil Production To Increase in November As Rig Count Falls

U.S. oil production is set to increase in November, according the Energy Information Administration’s (EIA) Drilling Productivity Report published on Monday.

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The EIA has forecast an increase of 81,000 barrels per day in November over October levels, even as the number of active oil rigs in the United States dipped steadily over the third quarter, shedding 20 rigs over the last eight weeks.

The EIA is also predicting that U.S. crude oil production will hit 9.9 million barrels per day in 2018, a new high for the United States, according to the agency’s Short-Term Energy Outlook. The previous high was 9.6 million barrels per day, which was reached in 1970.

The largest increase to crude oil production is expected to come from the Permian Basin, where the EIA is predicting an increase of 51,000 barrels per day to hit 2.66 million bpd in November.

Anadarko and Niobrara are both expected to increase production in November by 9,000 barrels per day.

U.S. gas production, too, is expected to increase in November by 827 million cubic feet per day, with most of the increase coming from Appalachia.

EIA’s Drilling Productivity Report also shows a rise in drilled but uncompleted wells (DUCs)—from 7,091 in August to 7,270 in September. The Permian had the greatest number of DUCs at 2,416 in September.

The EIA notes that while both drilling and completion has been declining since the oil price crash in 2014, the US has seen a greater decrease on the completion side of the equation, meaning that the gap between drilled and completed wells is growing larger. The increase of wells drilled but not yet completed positions the United States to react more quickly to any upward price movement, although may be taxing in an extended lower priced environment as capital is expended to drill without profit.

EIA is the only exhaustive -- non bias report -- All other Chinese...OPEC...API are guesstimates or self serving(i.e. increase price by showing rising demand). Yeah its not perfect -- but what other data points?

Truthteller on October 17 2017 said:

The oil market is controlled by charlatans. Oilprice.com is just one vehicle for their manipulation tactics. EIA numbers bogus. Rigs are down by more than 800+, oil field investment way down from 2014 yet we are expected to believe production skyrocketing. BS

Kr55 on October 16 2017 said:

DUC growth is probably more a result of bonus structures of execs than it is positioning for the future. If execs get bonuses for improving drilling volumes/efficiencies/lateral lengths, then it's great for them. Drilling is down to 20-30% of the cost of a shale well now. Why spend money to turn up a well when you can drill 3-4 wells for the same money and smash your targets for your bonuses?

John Kandi on October 16 2017 said:

I would like to see a news report on why the SPR is shrinking every week, is there a connection between SPR shrinking and Shale # rising?

JustMeNS on October 16 2017 said:

Why does anyone believe the EIA forecasts on production when it has been shown over and over and over that it is hopelessly wrong? Not by a bit but but 300,000 to 400,000 BPD. Why wasn't the HUGE decrease of 81,000 BPD reported last Thursday even mentioned let alone made into a MAJOR story?